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Torbov v. Cenlar Agency, Inc.

United States District Court, N.D. California, San Jose Division

July 8, 2014




Plaintiff Tsvetan Torbov, proceeding pro se, filed this action to stop a trustee's sale of his home following his default on a mortgage loan. Defendants move to dismiss Plaintiff's second amended complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. The Court has considered the briefing submitted by the parties and the oral argument presented at the hearing on July 3, 2014. For the reasons discussed below, the motion is GRANTED with leave to amend.


The following facts are taken from Plaintiff's operative second amended complaint ("SAC") and from documents that are judicially noticeable.[1] In September 2005, Plaintiff obtained a home mortgage loan from Taylor, Bean & Whitaker Mortgage Corporation in the amount of $359, 650, secured by a Deed of Trust on his home. (RJN Exh. 1, ECF 38) The Deed of Trust identified Mortgage Electronic Registration Systems, Inc. ("MERS") as the beneficiary under the Deed of Trust. ( Id. )

On October 15, 2013, Sage Point Lender Services, LLC, the trustee under the Deed of Trust, recorded a Notice of Default and Election to Sell under Deed of Trust. (RJN Exh. 2) The Notice of Default stated that Plaintiff's property was in foreclosure because he was behind on his payments; that the amount of the deficiency was $30, 157.55 as of October 11, 2013; and that the property would be sold unless Plaintiff paid the entire amount due. ( Id. ) The Notice of Default advised Plaintiff that he could obtain a written itemization of the amount due by writing to "Nationstar Mortgage LLC c/o Cenlar FSB" at an address provided, and that he might be able to arrange for additional time to cure the default or establish a schedule of payments to cure the default. ( Id. )

On January 9, 2014, Plaintiff filed this action, alleging that Defendants had refused to accept his monthly mortgage payments since February 2013. (Compl., ECF 1) On January 28, 2014, Sage Point Lender Services, LLC recorded a Notice of Trustee's Sale, scheduling a trustee's sale of Plaintiff's home for February 20, 2014. (RJN Exh. 3) The Notice of Trustee's Sale indicated that the total unpaid balance on the mortgage was $359, 723.82.[2] ( Id. )

On February 14, 2014, the Court issued a temporary restraining order enjoining Defendants from proceeding with the February 20, 2014 trustee's sale. (TRO, ECF 13) On March 10, 2014, the Court issued an order lifting the temporary restraining order and denying Plaintiff's motion for a preliminary injunction. (Order, ECF 30) The Court noted that "Defendant" had "submitted evidence showing that Torbov failed to make his loan payments as required, and that it acted within its contractual rights when it returned certain payments tendered by him, because those payments were insufficient to cure the default." ( Id. at 1-2)

On March 26, 2014, Plaintiff filed the operative SAC, alleging that he paid his mortgage by check for fifteen years; that in October 2012 Defendants advised him by telephone that under a new policy payments had to be made by telephone; that Plaintiff complied with the new policy; and that starting in February 2013 Defendants stopped accepting Plaintiff's payment by telephone without explanation. (SAC, ECF 35) Plaintiff then began submitting his mortgage payments by check, but Defendants returned those checks to Plaintiff. ( Id. ) Plaintiff alleges that he made several requests for an explanation, but "Defendant CENLAR" did not respond. ( Id. ) Plaintiff believes that Defendants conspired to create a situation that would put Plaintiff into default and deprive him of his home. ( Id. ) He asserts claims for: (1) quiet title, (2) violation of RESPA, (3) violation of California Business and Professions Code § 17200, and (4) conspiracy to defraud. It is not clear from the record whether the trustee's sale has been rescheduled and/or whether Plaintiff's home has been sold.


"A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted tests the legal sufficiency of a claim.'" Conservation Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts as true all well-pled factual allegations and construes them in the light most favorable to the plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the Court need not "accept as true allegations that contradict matters properly subject to judicial notice" or "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (internal quotation marks and citations omitted). While a complaint need not contain detailed factual allegations, it "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.


Before turning to Plaintiff's claims, the Court makes two observations. First, the SAC does not allege many facts. Without more information regarding communications that Plaintiff had with each of the defendants, dates of those communications, and what was said or written, Plaintiff cannot satisfy the basic pleading requirements set out by the Supreme Court in Twombly and Iqbal. Second, Plaintiff's opposition contains a number of assertions and theories that are not contained in the SAC. On a motion to dismiss, the Court considers only whether the operative pleading states a claim upon which relief may be granted; the Court cannot consider new assertions and theories presented in Plaintiff's briefing. See New Mexico State Investment Council v. Ernst & Young LLP, 641 F.3d 1089, 1094 (9th Cir. 2011) (when resolving a Rule 12(b)(6) motion "review is generally limited to the face of the complaint, materials incorporated into the complaint by reference, and matters of judicial notice"). As discussed herein, Plaintiff is granted an opportunity to amend. As the Court explained at the hearing, Plaintiff may amend only the existing claims that are the subject of the present motion. If Plaintiff wishes to assert new claims, he must file a motion for leave to amend his pleading pursuant to Federal Rule of Civil Procedure 15(a)(2) and Civil Local Rule 7-2. Plaintiff is encouraged to include in any amended pleading as many facts as possible regarding the mortgage transaction, the events that led to his default on the loan, and exactly what each defendant said or did.

A. Claim 1 - Quiet Title

Claim 1 seeks to quiet title to the property. "An action may be brought... to establish title against adverse claims to real or personal property or any interest therein." Cal. Civ. P. Code § 760.020(a). "A borrower may not, however, quiet title against a secured lender without first paying the outstanding debt on which the mortgage or deed of ...

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